As the wind-up act for the Financial Analyst Day at Microsoft today, its CFO, Chris Liddell, took the stage to try to put a shine on weak financial results that the software giant recently reported.

“So, what genetic disposition do you need to be a CFO? Essentially, you need to be miserable, you need to be the sort of person who takes drinks away from people at the end of a party,” said Liddell. “So, you know, my colleagues who have been giving you drinks all day, have told me to come out here and take most of them away from you.”

This was an unusually charming opening for typically dull CFOs, made even more so since it was delivered in Liddell’s jaunty New Zealand-Hobbit accent, which turns words like “share” into “sheeaar” and “schedule” into “shed-you-all.”

But no matter how cute the delivery, Liddell could not make the recent financial performance at Microsoft (MSFT) look adorable. The company missed revenue estimates by $1 billion in its most recent quarter.

Said Liddell: “And, not surprisingly, from a revenue point of view, it turned out to be a fundamentally different year than we thought it would. So, when I stood up here last year and said we thought our revenue would grow, it actually shrunk by three percent.”

Liddell dubbed the new economic situation the “new normal,” which sounds like it could be the topic on an “Oprah” show.

Still, Liddell, who has been a grumpier CFO than most during this econalypse–I once dubbed him “Glum Chris at the Recessiondome”–was more positive going forward.

“I can’t say this is good that we’re still down relative to where we were a year ago,” he said. “But, on a relative basis, it was a reasonable year from a shareholder value point of view, given the context of the environment that we had.”

Liddell said Microsoft was now operating in a “reset” mode, a term often used by Microsoft CEO Steve Ballmer.

“The economic path that we are all going to face, regardless of any industry, is going to be relatively subdued compared to what we’ve been through,” he said. “So, those companies that are going to drive superior shareholder value in the new environment are not only going to be the ones that mapping the reset in a very good way, but are going to manage the new normal in a particular way as well.”

That means having cash, controlling costs, pushing for innovation and market share, said Liddell.

He forgot to add judicious coupon-clipping!

After he was done, Liddell was joined onstage for an executive Q&A by Ballmer, COO Kevin Turner, Online Services President Qi Lu and, finally, Chief Software Architect Ray Ozzie, who was apparently in the special guest star role for this year’s meeting.

It was emceed by investor relations guy Bill Koefoed, who I must admit, is not even close to as dull as he is when reading all that legal mumbo-jumbo at quarterly earnings call.

(Even to my assistant Ed–to whom Koefoed’s voice is like Valium, since I listen to those calls on a speakerphone at All Things Digital HQ, and it puts him into a deep stupor.)

There were various questions for the execs–all men, by the way, although who’s counting? Well, okay, me!–including:

* Whether Microsoft might make more acquisitions.

“We don’t acquire as a strategy,” said Ballmer flatly.

* Its relationship with Yahoo (YHOO) going forward and if it might lead to even closer ties.

“If there was an implicit question are we interested in a full acquisition, the answer is no. Yahoo is happy to be independent, we’re happy to be independent, we’re delighted with search partnership,” said Ballmer even more flatly.

There were also a whole bunch of financial questions, most on the far side of wonky. Ozzie spoke only briefly about big computing ideas, which is his job at the software giant.

And then it was over and he and the other big execs headed for cocktails with those gathered.

And, last I saw, Liddell was not wrestling any drinks from the attendees. Not yet, at least.

The fun never stops at Microsoft, it seems.

Well, not fun–more like a long march of khaki-clad Softies.

They will be on display bright and early this morning at the company’s annual Financial Analyst Meeting, a cavalcade of top execs at the tech giant blabbing away.

BoomTown will be there covering it in person, natch!

The Microsoft management smorgasbord includes:

CEO Steve Ballmer, COO Kevin Turner, Entertainment and Devices President Robbie Bach, Online Services President Qi Lu, Microsoft Business President Stephen Elop, Servers and Tools President Bob Muglia, Chief Research and Strategy Officer Craig Mundie, Chief Software Architect Ray Ozzie and CFO Chris Liddell.

I am betting that most of the focus at the gathering, which is being held at the worldwide HQ of Microsoft (MSFT) in Redmond, Wash., will likely be on two major events over the last week–its billion-dollar revenue miss in its fourth quarter and its just-born search and online advertising deal with Yahoo (YHOO).

The former, of course, was bad news for Microsoft, as it continues to signal weakness in its core operating system software and server businesses, due to lower demand for personal computers in the midst of the econalypse.

The latter was good news, of course, since Microsoft seemed to score a coup in nabbing the search technology business from Yahoo with no big upfront payments.

I have a lot of questions about both these issues, as will the crowd of reporters and Wall Street sharpies at the FAM, which is what they call the meeting here.

There could even be be plenty of answers, especially given that the entire leadership of Microsoft will be there.

Here is a link to a live Webcast of the FAM event, if you want to join the party too.

For all the noise, it’s worth paying attention, because Monday’s outlook will be cloudy, as in cloud computing.

The day will include a speech from Microsoft’s Chief Software Architect, Ray Ozzie (pictured here), and others on, among other topics, its cloud infrastructure service initiatives–designed to match aggressive efforts from Amazon (AMZN) in the space.

There will also be a demo of Windows 7, which will hopefully put an end to the long Vista nightmare when it is eventually released. (To be ahead of the curve, see a video below of Microsoft’s CEO Steve Ballmer and founder Bill Gates showing Windows 7 off at our sixth D: All Things Digital conference in May.)

In all, a Windows geekfest!

Microsoft (MSFT) execs will probably be in a good mood given the decent earnings results the company announced earlier this week for the third quarter. Revenue was up nine percent to $15 billion, even though net profits only increased 1.9 percent to $4.37 billion.

Still, that was a pretty good performance in a down economy, due to strength in Microsoft’s powerful Windows and Office franchises. And despite–as usual–the weakness of its online division.

While the revenue for its MSN, search and advertising network grew to $770 million, or up 15 percent in the quarter, operating losses doubled to $480 million from $267 in the same period a year ago. Search grew more than display advertising, a forward outlook Microsoft that maintained.

And still no digital chief, long promised by Ballmer, in sight either. Sources said that head, who will lead the unit, has still not been selected. (BoomTown is officially beginning to feel sorry for longtime leading internal candidate Brian McAndrews.)

While PDC has never been an online-focused event–this is for the big-dog businesses of Microsoft–it will still be interesting that the event will focus on continued movement toward the cloud.

It’s an inevitable–though decidedly dicey–journey for the software-dependent behemoth. So, the continued transformation should be interesting to watch.

Here is the Windows 7 demo from D6:

I suppose that’s the reason Microsoft is not loaded for bear and headed back down to Sunnyvale to make another play for Yahoo right now.

Not even after Jerry Yang orchestrated activist investor Carl Icahn’s defenestration, by inviting him on the board at Yahoo (YHOO), where he will be 100 percent silenced.

Not even after the stranger-than-fiction shareholder vote miscount (oops–we thought no meant yes!).

Not even after Yahoo stock’s consistent flirting-with-the-teens price.

Not even after its second-quarter results made it clear that it’ll be an uphill battle for Yahoo management to achieve the aggressive financial plans outlined when the Internet company was fending off Microsoft’s takeover bid.

So while opportunity is surely knocking for Microsoft (MSFT), especially if it wants to reach its stated goal of competing with Google (GOOG) in the online space, the software giant prefers not to answer the door right now.

Sources close to Microsoft’s thinking say the company is waiting for the right time, when Yahoo’s stock price is even lower and when Wall Street completely gives up on management, to figure out the next move.

Instead of acting, according to sources, and taking more flak for those actions, the whole brain trust up there is taking a breather and biding its time.

(In fact, many top Microsoft execs are on vacation, which is why August is a good time for Yang–who is himself headed to China for the Olympics–not to worry about a hostile attack.)

The strategy? Sitting in the grass–waiting, watching and making plans.

But, in truth, Microsoft cannot really make plans–except for the vague we’ll-keep-coming-and-coming in the online search and display business motto–until it decides the best way to reach its intended goals.

The first order of business, of course, remains the selection of a digital czar, which was promised by Microsoft CEO Steve Ballmer after top exec Kevin Johnson quit unexpectedly several weeks ago.

As BoomTown previously reported, the top inside contender is SVP Brian McAndrews, who came to Microsoft via its pricey $6 billion acquisition of aQuantive.

And Microsoft’s future-of-software guru Ray Ozzie remains a favorite choice of the troops.

But, sources said, Ballmer is still interested in a possible high-profile outsider coming in to shake things up.

The problem is, most such execs see the job for what it is–a potential tar baby that will only muck their careers up and produce no easy victories.

“Who wants the headache?,” said one outside exec who has been contacted by Microsoft. “While there might be upside there, the downside is much more significant.”

Thus, sitting very still for now might, indeed, be Microsoft’s best choice. It certainly is a lot less messy.

But there is a movement afoot among its developers and other execs at Microsoft (MSFT) to push for Chief Software Architect Ray Ozzie (pictured here), who replaced Founder Bill Gates in the job just over two years ago.

Ozzie’s role at Microsoft has been to think the big thoughts about where computing is going, and he has been integral to the company’s vision of providing “software plus services.”

Essentially, that boils down to Internet-accessed software–which is Microsoft’s longtime cash cow–a kind of mash-up that plays to the company’s strengths.

But some think there is no bigger puzzle for Microsoft to finally solve now than to figure out how to finally succeed in the online space.

Microsoft’s online unit lost $1.2 billion in the past fiscal year, double what it lost in 2007, with quarter after quarter of disappointment, even as rival Google (GOOG) and Microsoft’s acquisition quarry Yahoo (YHOO) have raked in the profits.

That’s why some think Ballmer should put Ozzie in charge. With a long history of being a strong product exec, he also is a well-respected leader throughout Microsoft and, perhaps more importantly, the tech industry.

“We need a real star to shake up the status quo,” said one Microsoft employee, in a sentiment voiced by many BoomTown spoke to. “Ballmer has to put someone who can command the attention and respect of all the parts of Microsoft, which just can’t seem to get it together in our online business.”

But Ballmer (pictured here), said other sources, might be loathe to remove Ozzie from his overall tech guru role and place him in such a grinding and potentially thankless job.

There are other internal candidates at Microsoft for the opening, which was just created after the sudden departure of Platforms and Services Division President Kevin Johnson earlier this week.

With Johnson’s departure, Microsoft announced it would break up the unit into two parts. One will be a Windows/ Windows Live group, headed by Ballmer and run by a trio of execs, and the other will include online services such as search, MSN and online advertising.

There are several insiders quite interested in taking on that daunting task, said sources.

They include Senior Vice President Brian McAndrews, who runs Microsoft’s Advertising and Publisher Solutions Group and who came to the company via its $6 billion acquisition of ad firm aQuantive. He is widely seen at Microsoft as having the leading edge for the position.

Strategic Partnerships SVP Yusuf Mehdi, who has run online businesses for Microsoft before, is also a contender.

Ballmer has also put feelers out to Web leaders all over Silicon Valley of late, including former Facebook exec Owen Van Natta, to come and refurbish its Internet arm. Sources said Ballmer is also interested in execs like former CNET head Shelby Bonnie, as well as others.

One of the leading outside candidates was former AOL (TWX) head Jon Miller, who, sources said, told Ballmer yesterday that he does not want to be considered.

In fact, Miller is now likely to join the board of Yahoo as part of a deal the Internet company struck with activist investor Carl Icahn to cease his proxy fight.

Yahoo was, not surprisingly, top of mind in Ballmer’s speech before financial analysts yesterday at Microsoft’s Redmond, Wash., HQ.

Not surprisingly, Ballmer went out of his way to pooh-pooh Yahoo–a behavior that looks like it will become Microsoft’s latest weapon of choice for denigrating Yahoo and tanking its stock, in the wake of Yahoo’s rejection of Microsoft’s initial bid to buy the company outright and then, just its search business.

Pointedly calling the important search arena a “two-horse race” between Microsoft and Google–despite the fact that Yahoo is the No. 2 player, with a market share more than double Microsoft’s–Ballmer sounded more like a spurned swain for Yahoo’s affections.

Trotting out his somewhat inexplicable distinction of the Yahoo bid being “a tactic, not a strategy”–whatever!–Ballmer said: “We had a set of principles, we talked about them, it didn’t work out. … Fine, we’re done. We can move on.”

It seems Neil Sedaka was right: Breaking up is hard to do. As a parting shot, even though he was careful to leave the door open to future talks with Yahoo, Ballmer added: “People say ‘you have to buy Yahoo.’ … No, we don’t.”

Except Microsoft, um, does.

In any case, what the company will definitely do is spend more piles of money on its online business–an unspecified $500 million going forward, to be exact, which Ballmer said was critical to Microsoft’s future.

“There is this huge, huge, huge new opportunity around the Internet and online and we have to embrace that opportunity and invest in that opportunity,” Ballmer said.

That’s why some think Ozzie would be perfect for the job, now that the once fast-rising Johnson is gone.

He left, sources said, due to the collapse of the Yahoo deal, an effort for which Johnson served as point man.

Sources said that if the deal went through, Johnson would have run the Yahoo business, noting he has long indicated he wanted higher-level experience.

He will be getting that in his new job as CEO of Juniper Networks (JNPR), a quick move that many sources said surprised Ballmer and irked him (and things were already tense due to the failure of the Yahoo deal).

“Ballmer has to have a win here,” said one Microsoft source. “Even he can’t afford to miss again in this important space.”

That is the other certainty related to Microsoft’s rocky road on the Web: No, he cannot.

Please see this disclosure related to me and Google.

OK, for those who refuse to live in a little place I like to call reality, let’s review the news coming out of eBay yesterday regarding its 2005 acquisition of Skype for the then unheard-of price of $2.6 billion.

The Internet auction giant declared the purchase of the once hot online telephone start-up a dud yesterday, taking an asset-impairment charge of $1.43 billion for the deal.

In addition, Skype founder and CEO Niklas Zennström was out. The move, said eBay in a filing, represented “updated long-term financial outlook for Skype.”

Quickie translation: Major buyer’s remorse.

While Zennström said he was “proud” of Skype’s performance of late (it has grown its users and revenue), the fact of the matter is eBay could not spin straw into gold with the acquisition and make the kind of money its lofty economics required for the once-hot VOIP leader. Thus, eBay only had to also fork over one-third of its $1.7 billion payout to investors, too.

While many were saying all this was due to who bought Skype–maybe it was eBay’s fault and other potential acquirers could have done better–Skype was once thought of as a giant killer in the telephony world, with many going on and on about its vast potential.

Sound familiar? Before Facebook sky-high valuation fans go nuts, I know there is a difference between the economics of a Web phone service and that of an ad-based, possibly target-rich interactive online environment.

But there was an awful lot of hype, I mean, hope back in 2005 that Skype could easily turn into a massive moneymaker by selling a wide range of goods and services beyond its core Internet calls offering.

Because advertisers and other services could target its motivated and highly trackable users, went the story, that meant the possibility of ladling on more revenue and profits.

In fact, by leveraging Skype’s exploding popularity, eBay had hoped to add premium offerings like conference calls and links to its own vast networks of sellers on its flagship auction site. There was a user-generated Yellow Pages and even an offering called Skype Prime that allowed callers to charge a variety of services.

All good ideas that just did not pan out with quite the results expected, all directly due to the exorbitant sum overpaid for Skype.

Revenues for Skype were only $90 million in the most recent quarter (out of eBay’s overall $1.83 billion), despite its adding 75 million more users since the acquisition to total 220 million.

As I wrote about Facebook’s talks with a variety of investors that value it at upward of $10 billion, Skype was a story about the difference between potential and actual when faced with the real-world difficulties of making a popular Web site into a truly profitable and sustainable business.

I am not sure how I managed to get to be the little rain cloud at the Facebook parade, but the simple act of questioning the possibility that it might not make the kind of money its cheerleaders envision, especially in light of the Skype write-down, seems prudent.

We all know it’s admirable–even astonishing–that its founder Mark Zuckerberg and his small team have grown the terrific and vibrant social-networking service into a 40 million-plus user base and growing with plenty of promise with regard to new kinds of advertising paradigm.

But the business, as it stands today, only has about $30 million in profits on $150 million in revenue.

More importantly, half that revenue comes from a sweetheart guaranteed revenue deal with its ad-partner Microsoft, which still is a non-economic wash for the software giant more interested in planting a flag and paying for some pricey education in the social-networking sector.

That has not stopped Microsoft from offering Facebook, according to sources close to the company, investment dollars in the hundreds of millions for a small stake.

Said those familiar with the most recent offer, such an investment would include a possible right to buy the company should Facebook decide an all-out acquisition is the way to go (doubtlessly a Microsoft preference).

Sources note that Microsoft is now blowing hot and cold about such a deal, which is being championed by CEO Steve Ballmer and Chief Software Architect Ray Ozzie, who lends the Seattle behemoth some much-needed Silicon Valley cred.

At Facebook, Zuckerberg is key to the talks, helped by such advisers as VPs Owen Van Natta and Matt Cohler and CFO Gideon Yu (whom we like to call “Death Cat” for his uncanny ability to cuddle up to hot Internet start-ups, much like that nursing-home feline who can sense death).

According to sources, Microsoft remains obsessed with keeping rival Google out of the picture and positing that the search part of the Facebook phenomenon is where the real gold is located.

While adding more robust search to the site seems fine, Facebook execs do not consider it a killer app and are perplexed by Ballmer’s laser focus on it in recent talks.

“We don’t want to be taken in by the siren song of search,” said one.

That’s especially true given the engaged nature of its users while on the site with, well, the site. After all, you don’t really want to search when you are hard at work stalking your “friends” on Facebook.

All kidding aside, that kind of motivated user is what has kept suitors lining up, including solo visits to Facebook HQ in Palo Alto, Calif., by Yahoo co-founder and CEO Jerry Yang (inquiring about doing some sort of deal–after its botched acquisition effort from last year–such as taking over Facebook’s international ad-serving business).

So, too, has Google come on by, not necessarily to invest in or buy Facebook, but to look more closely at a variety of ad and apps plays on the service (and, you have to guess, to drive Microsoft bonkers).

And others in droves, such as a recent visit by Viacom head Philippe Dauman, who just wanted to say hello to the Facebookers.

In all this hubbub, one has to wonder what Facebook wants and needs?

Here’s my educated and reported guess:

1. A redo of its ad deal with Microsoft, getting even more guaranteed dollars and more latitude over its own sales efforts. An extension would be fine, I guess, but perhaps not, given interest from others to sign up Facebook and make friends with it.

2. An international ad partner, although I don’t expect Facebook to hand over the store here in this critical arena for itself. While the site’s U.S. growth has been strong, its international aspirations will be key to its long-term success.

Possible partners here are obvious: Yahoo, Google, Microsoft.

3. An investment on its terms and not necessarily with Microsoft or Google or whatever giant media company that comes calling with glad hands and lots of shiny baubles to offer.

What Facebook must do is evaluate which partner actually benefits its goals of further growing its member base here and abroad, gives it access to new marketing opportunities and forks over the unencumbered cash and advice to create or buy new assets it needs to continually improve itself.

4. Zuckerberg has got to be looking at what happened over there at rival MySpace and probably wants to do things a little differently. While MySpace has grown a lot since its purchase by News Corp., it’s an open secret its founders Chris DeWolfe and Tom Anderson think they sold too soon and now are angling to be better compensated.

In addition, it’s nicer to be in charge of your own fate, if you can pull it off. Because even if Microsoft or any other buyer promises total freedom, when you sell (especially to an already public company), you instantly become an employee–a well-paid one, to be certain–and your fate is no longer in your hands.

And, like Skype’s Zennström, that fate can be “updated” once performance falls off. Which it will.

5. I think that Facebook is well positioned to stay independent and not sell at all, although it is clear it thinks taking big money is a good idea.

I am not so sure it is, for a lot of reasons (not the least of which are the complications now surrounding the valuation of its stock options–Section 409A!–and the ability to attract talent with a good package).

But if Facebook can pull it off in a way that gives it running room and relative freedom, I can hardly imagine it will resist.

“We’re not stupid over here, we want the right deal at the right time that fits into the right thing for us,” said one exec there.

Right.

Please see this disclosure related to me and Google.